RUMOURS over the Government's plans to change site provision for gypsies have been swirling around camps since the Conservatives declared their intention to review the law in a short sentence buried in their election manifesto.

Yesterday the worst nightmares of gypsies, particularly those camped illegally, appeared to come true as Sir George Young unveiled his consultation paper, which revealed a determination to adopt a hard line on the 'nuisance of illegal encampments'.

Gypsy organisations are convinced that even though Sir George was at pains to make the distinction between traditional travellers and New Age travellers, the two are inseparable in the minds of Tory backbenchers.

According to some, a number of leading backbenchers have used the public outcry over the so- called hippies to attack the problem of illegal gypsy encampments, long a source of anger among Tory voters in the shires.

Gypsies maintain that much of the problem has been caused by the lack of political will by successive governments and county councils to build sites, leaving 4,500 families camped illegally.

Even though local authorities are given full grants to build the sites under the 1968 Caravan Sites Act, the outcry from residents as soon as one is proposed has led to great difficulty in obtaining planning permission and discouraged construction.

The Government has the power to instruct local authorities to fulfil their commitments to provide sites under the legislation, but has been reluctant to do so because of unpopularity with voters.

Hughie Smith, president of the National Gypsy Council, said that citing the apparent failure of the legislation as a reason for backtracking was ridiculous as the Government was at least partly responsible.

'There has been only one piece of legislation in the past 30 years which effectively benefited the gypsies, the 1968 Act,' he said. 'To some extent it has not been working, but it could have been effective if a time limit had been placed on the building of sites to accommodate all gypsies.'

Luke Clements, a specialist in gypsy law, agreed. 'It is purely a lack of political will.

'Of course it's not a popular duty among the voters, but that's not the point. Now we have the prospect of gypsies on illegal encampments being arrested because it becomes a criminal offence for the first time.'

Such a scenario raises the spectre of confrontation with the authorities along the lines of the outbreaks of violence between gypsies and the police in the years leading up to the 1968 Act which, even though imperfect, eased tensions. Over the years the Department of the Enviroment had issued a number of circulars urging tolerance toward illegal encampments while there were not enough official sites. It also said that planning applications for gypsies on private sites should be treated favourably.

Donald Kenrick, an adviser to the Romany Guild, said that there were now about 2,000 gypsy families on private pitches which had gone some way to alleviating the shortage of sites. But it now looked as if even this status was to be withdrawn.

In its place the Government wants to encourage gypsies to settle in homes, saying that this is what many want, and may be prepared to offer cash incentives. Gypsies, however, reject the idea that settling is their desire, and say only a lack of legal sites forces them off the road.

Yet, as the prosposals were sinking in, there was a glimmer of hope.

Mr Clements believes it would be impossible to enact legislation along the lines proposed as it would contravene EC legislation. 'It would be a fundamental breach of the European Convention on Human Rights, which makes it an offence to discriminate against any minority,' he said.

'Looking at this, it is inconceivable that the Government could bring in this legislation.'

The only reason the Government had managed to deflect international criticism of its provisions for gypsies was the 1968 Act and its tolerant attitude towards illegal sites, he said.

'This is simply a knee-jerk reaction to a problem which requires a lot of thought, and thought is not the greatest asset of this Government.

'If it managed to implement this it would amount to victimisation on a level only experienced in South Africa. It's like trying to enact apartheid.'